I totally sympathize with you. It doesn't help that "lots of other groups" do the same thing and fly under the radar, never formalizing.
Odds are that nothing would ever happen, no one would ever investigate. But even so, I couldn't put my name on an account or be an officer in a group I knew to be operating illegally.

Our middle school PTO was at this crossroads a year or so ago. I told them I'd help and be a volunteer, but for the reasons stated above couldn't be an officer.

They were phasing out of their big revenue activity (selling PE uniforms) so probably wouldn't hit the $5000 anyway, but it was borderline - depending on future plans.

After talking it over, they decided to stay informal and under the $5000 limit. If something DOES come up, some larger opportunity for fundraising, they will coordinate with the school, turning the funds directly over to the principal for whatever the agreed upon purpose.

I think this was a good solution. It doesn't close the door to a future opportunity, but justifies them staying small and informal. Then again, a middle school PTO is far different than one in elementary that serves as a central focal point.

Thank You. This is very helpful. It has caused quite the controversy. No one wants to formalize as a non profit. If the orginal Non Profit was established under PTA and then dropped when we formed our PTO..the biggest question is whether they will renew the non profit status as a PTO now. It is confusing trying to explain all the specifics to the board and principle. I have spent quite a bit of time researching the information here and calling the IRS. Being a new PTO president is hard and change is very hard when we have been operating one way for so very long. I am afraid to put my name on the signature card if things are not done correctly.

If your old EIN number is deactivated, you CAN get it activated again. I had to do that with ours since we didn't file our 990 in years and they will deactivate any Federal Tax ID when they don't have any activity with that number. YOu need to find a letter from the IRS confirming your Tax ID (check your old Treasurer's records) and then just call them to reactiviate it. You can ask them at that time if you can change the name or would that require a whole new number. If you need a new one, it can be done over the phone and is VERY simple.
Advise is to use your own Tax ID, not the school's, and then you will have your own bank account and identity to file for grants, funding, & tax exempt status.
call 1-877-829-5500 to reactivate your number
call 1-800-829-4933 to apply for a new EIN

You are actually talking about two separate steps here.

Getting an EIN is no big deal. There's no fee and it can be handled via the phone, online, or by mailing it a one page form called the SS4. So you can get your own tax ID (EIN) quite easily.

However, getting your organization qualified as 501(c)(3) non profit organization is a larger step. That requires a hefty fee (typically $750), a fairly rigorous application form, and some supporting documentation.

As per the IRS, the rule of thumb is that a charitable organization - such as a parent group - should formalize as a 501(3)(3) if they typically have more than $5000 total (not net) revenue.

You can opperate with your own ein number and own bank account. I am questioning the statement your principal said with 'if no one else is doing it' i she for real? At the time we did ours it was because we wanted to be on the up and up, we were paying tremendous amounts in taxes on our fundraisers and it seemed a shame to be doing that. Why not come up with a list of pros and cons...

Our School District and State Auditors Office say we can not use the school's tax ID number to open a bank account. As next years new PTO President, I checked our account and it was opened using an old tax ID number from 1995 under PTA. We are no longer a PTA. The tax ID number that we have been using has been deactivated, but our account is still open. It is my understanding that we need to apply for a new EIN and open a new account. I beleive our PTO members would suggest we leave things alone and not bother with the account. I tried to explain to our Principal about our PTO paying the fees and applying for our own non profit tax ID number. I can't seem to get her to understand why we need to do this. Her reply would be ..if none of the other schools are doing it and we have not had to do it in the past, why do we have to do it now. Do I just leave everything alone...or explain things a different way? We do bank more than $5000.00 a year. Can I please her and continue to operate without applying for the non profit status and still maintaining a seperate PTO Banking account. She beleives it is not neccessary to pay the fees to apply for non profit...